Benefit costs outpace salary increases

Public jobs have a reputation: low pay, outstanding benefits. But since 2007, participants in our annual salary survey have increasingly complained about the rising costs of their benefits. Although few have reported outright cuts over the years, many say benefits have been diminished or reduced. This year’s crop of respondents is no different.

Many responding to our survey say salary freezes feel like salary cuts when combined with increased out-of-pocket health care and other costs. Even raises aren’t enough to offset rising copays, deductibles, and employee contributions. A municipal employee in Florida presents the math: “First pay increase in more than five years in 2013: 2.5% merit and 1.5% across the board. Individual health insurance contribution increased 13%.”

A Midwest wastewater/stormwater manager describes upcoming union negotiations: “Even if we get a raise, we will have less income because a higher percentage of funds will need to be contributed to the pension fund, which is basically what has happened the last three years.”

The upside: One-half of respondents still believe their benefits packages are better than those in the private sector, and nearly one-quarter (24%) say they are about the same. Plus, 71% are somewhat to very satisfied with their benefits packages, as compared to 12% who are somewhat unsatisfied and 3% who are not at all satisfied.

“New hires are receiving fewer benefits at lower salaries. State legislature is looking for a way to ensure vested employees lose their retirement vestiture if they change jobs, even if they remain in public service—they’d be considered ‘new hires.’ Even accepting a promotion could force an employee to lose retirement.” —Florida state employee making $50,000